How are companies adjusting their strategies to survive COVID-19 disruption without losing sight of long-term business sustainability? Read our survey of over 190 companies to find out how they are prioritizing limited resources to maintain focus on success factors including:
- Addressing changing business models
- Adopting new technology
- Protecting the environment
Please enjoy the summary* below. Click here for the full report, thank you to our sponsor Dassault Systemes (registration required).
You can also read our 2019 research, Executive Strategies for Long Term Business Success, shared that sustained business viability was already at risk from disruption. The study found that companies must adapt to shifts in business models, technology, the environment, and socio-economic factors to remain competitive. The global disruption from COVID-19 has added to the risk.
Table of Contents
- Global Disruptions Compound Business Risk
- Disruption Impacts Company Strategies
- Strategies Understandably Reflect Disconnects
- COVID has Multi-Faceted Impacts
- Recognizing What’s Important to Long-Term Success
- Factors Influencing Strategy are Relatively Consistent
- Companies Simply Can’t Do Everything
- Business Transformation Leads Sustainability Needs
- Workforce Development Importance Has Increased
- Conclusions and Next Steps
- About the Research
- Acknowledgments
Global Disruptions Compound Business Risk
Recognizing Turbulent Times
In 2019, we asked, “How has business risk and disruption increased for your market over the last five years?” About three- quarters of companies shared that risk and disruption increased, and a full one-half of companies with over 10,000 employees said that it had grown “significantly.” Market disruption is the status quo, as only 4% said that market upheaval had decreased.
Seeing Beyond the Crisis
Now, many companies that were already fighting for their
competitive position in a rapidly changing world are facing
their own viability. The economic fallout from the global
pandemic will undoubtedly alter the world marketplace dramatically. Despite the crisis, however, companies still recognize the need to focus on long-term business sustainability.
Taking Perspective on Global Disruption
Global challenges, and currently COVID-19 in particular, have significant personal and professional impacts.
While we continue to hear that this is an “unprecedented” time, periodic global disruptions are the norm. This survey investigates the impact of global disruptions on business strategy. Most respondents were likely responding with the current pandemic in mind, but disruption could also apply to other world events such as earthquakes, tsunamis, volcanic activity, hurricanes, and human- created events like terrorism or armed
conflict.
As we’ll see, the impacts of the global disruption caused by COVID-19 aren’t the only risks companies face. Current survey results show that the overall sentiment about business risk and disruption has stayed much the same into 2020. While addressing the impacts of the pandemic are urgent, other challenges have not subsided.
Business Transformation Leads Sustainability Needs
Being Aware that Economics are Still the Largest Drivers of Success
Let’s drill down into some details on the economic, environmental, and social sustainability factors that impact long- term success. In the prior study, we asked, “How important are the following environmental, economic, and social sustainability factors to the long-term success and profitability of your company?” We identified that economic viability is priority one. “Ensuring business longevity with the right business model” is still the top priority, and significantly increased in criticality. Our recent observations show that companies see business model transformation as a way to survive or thrive in their new reality.
Considering Other Important Sustainability Factors
Likewise, “complying with government regulations” is still in the same second priority ranking, and has also grown in criticality. The importance of constrained / diminishing resources has increased as well. On the other hand, companies view that the criticality of maintaining a green corporate image, reducing the company’s direct environmental impact, and improving the company’s social impact have diminished in importance to long- term success. Although companies don’t feel they can currently prioritize sustainability, we believe the focus will return after companies and their customers exit crisis management mode.
Planning a Path to Achieve Important Goals
The focus on the global disruption may have companies in “survival mode,” but sustainability is still important. Recent discussions show that some companies want more regulation to help drive sustainability. They believe that regulation is the only way for them to be pushed, and that governmental rules are more likely to impact the supply chain and level the playing field so they can do the right thing instead of being undercut by somebody that doesn’t care or practices greenwashing.
Conclusions and Next Steps
Companies are in Crisis due to COVID
The current economic and market impacts of COVID-19 have forced many companies into survival mode. The majority of companies (56%) say that responding to the global disruption puts challenges on their ability to execute on essential corporate initiatives. This creates disconnects between what they view as critical to long-term business success and their current priorities.
Accelerating Digital Transformation and Maintaining Innovation
Almost one-half of businesses (46%) have increased focus and/or accelerated digital transformation due to the pandemic. Digitalization is an important pillar of long-term business success that can help companies survive the current disruption and become more resilient for the future. Product and service innovation is also gaining or at least holding its ground. Innovation is a crucial way companies can pivot and adapt to changing markets, needs, and resources.
Putting Lower Priority on Workforce Development and Environmental / Social Sustainability
The research shows that companies are not placing as much priority or attention on other pillars, including workforce development and environmental and social sustainability. The responses do show, however, that they understand the long-term importance of these factors.
Maintaining Focus on Long-Term Success
Just over three-quarters of companies report that addressing global disruption is a high priority. While addressing the current global crisis is the obvious concern, companies must return their focus on all of the critical areas of business sustainability quickly. Despite short-term disruption, they must continue to build for the future if they want to remain viable.
*This summary is an abbreviated version of the research and does not contain the full content. For the full research, please visit our sponsor Dassault Systemes (registration required).
If you have difficulty obtaining a copy of the research, please contact us.